While a Home Equity Line of Credit (HELOC) may not be the best method to fund your vacation to the Bahamas, there are several responsible uses for this source of credit. My thoughts are to use HELOCs for needs rather than wants.
Paying Off High Interest Debt: You can use a HELOC to pay off credit card debt, so long as you cut up those credit cards and refrain from racking up any more high-interest debt once it’s paid off.
Renovating a Home: Whether you need to make vital home repairs, or have plans for a value-raising remodel, there’s probably no more popular reason to obtain a HELOC.
Starting a Business: A HELOC is one source of capital you can obtain for a new business. Just make certain you’ll be able to pay off the debt if your business fails, otherwise your home is at risk.
Paying for Education: As education is considered one of the so-called “good debts,” a HELOC can be an investment in your future or the future of a loved one.
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By Adam Lucas Adam Lucas holds a Finance degree and an MBA from the University of Kentucky. His work has appeared in many major outlets including Yahoo, AARP.org, and GoBankingRates.com.
Monday on the Money is a weekly commentary from Bank of the Ozarks providing financial advice and solutions important to you and your family.